Commerce Media Is Reshaping the Funnel. Here’s Who Wins.

The commerce media ecosystem is the convergence of retail data, digital advertising, and purchase intent signals into a single infrastructure that connects brands to buyers at the moment decisions are made. It sits at the intersection of media buying and transactional data, and it is growing fast enough that brands without a clear position inside it are already behind.

This is not a channel trend. It is a structural shift in how advertising works, who controls the data, and where the value in the media supply chain actually lives.

What Is the Commerce Media Ecosystem and Why Does It Matter Now?

Commerce media is the advertising infrastructure built around transactional data. Retailers, travel platforms, financial services providers, and marketplaces are all sitting on purchase history, browsing behaviour, and loyalty data that is genuinely predictive of future buying decisions. They are monetising that data by selling access to it through their own ad networks, on-site and off-site.

Amazon built the template. Its ability to connect ad spend to actual basket data changed what closed-loop measurement looked like. Every major retailer with a loyalty programme and a digital presence looked at that and started building their own version. Now you have Walmart Connect, Kroger Precision Marketing, Boots Media Group, Tesco Media and Insight Platform, and dozens more. The infrastructure is proliferating faster than most brand teams can evaluate it.

This matters now for a specific reason. Third-party cookies are effectively finished as a targeting mechanism. The platforms that have first-party transactional data are not just surviving that change, they are benefiting from it. They have become structurally more valuable to advertisers who have lost the targeting precision they used to take for granted.

If you want to understand where this sits in a broader go-to-market context, the Go-To-Market and Growth Strategy hub covers the commercial frameworks that make decisions like this legible at a senior level.

Who Controls the Commerce Media Ecosystem?

Control in this ecosystem is not evenly distributed. It concentrates around whoever holds the most useful data at the most commercially relevant moment. Right now, that means four types of players.

Retailers with loyalty infrastructure. Grocery chains, pharmacy networks, and mass-market retailers have decades of purchase data tied to individual customers. That data is deterministic, not probabilistic. When a retailer tells you that a customer buys premium pet food every three weeks, they mean it. That precision is genuinely rare in advertising.

Marketplaces. Amazon, eBay, and category-specific platforms sit at the point of purchase. They see what people search for, what they consider, what they abandon, and what they buy. That signal density is hard to replicate anywhere else in the media ecosystem.

Financial services platforms. Banks and card networks see spending across categories, merchants, and geographies. BCG’s work on financial services go-to-market has long pointed to the depth of behavioural insight these institutions hold. Translating that into advertising infrastructure is a natural extension, and several are doing it.

Travel and hospitality platforms. Booking intent, destination data, and spending patterns around travel create a targeting layer that is highly specific and commercially motivated. These platforms are building media networks on the back of it.

The common thread is transactional first-party data. Any platform that has it is evaluating whether to monetise it through advertising. Any brand that needs it is evaluating which networks are worth the complexity.

Why Most Brands Are Approaching This Wrong

I spent a long time earlier in my career overvaluing lower-funnel performance. When you are running a P&L and trying to justify media spend, the closed-loop attribution that retail media offers is seductive. You can see the sale. You can tie the ad to the basket. The board meeting is easier.

The problem is that a lot of what performance media gets credited for was going to happen anyway. Someone who already buys your brand, who is already in the purchase cycle, who is already searching for your category, is not being created by your sponsored product ad. They are being captured by it. That is useful. It is not the same as growth.

Commerce media has the same structural tension. The closed-loop attribution is genuinely better than most digital advertising. But if you only use it to reach people who are already close to buying, you are not building a brand. You are defending existing demand. That is a margin game, not a growth game.

The brands that will win in this ecosystem are the ones that use commerce data to reach people earlier in the decision process, before intent has fully formed. Think about the clothes shop analogy: someone who tries something on is ten times more likely to buy than someone who walks past the window. Commerce media, used well, gets you in the fitting room. Used badly, it just puts a coupon in the hand of someone who was already at the till.

The Semrush overview of growth strategies makes a similar distinction between acquisition and retention mechanics. The framing is different but the underlying tension is the same: activity that looks like growth is sometimes just churn prevention with better attribution.

The Data Layer: What You Need Before You Can Play

Commerce media networks are built on first-party data. To get the most from them, you need your own first-party data to bring to the table. Without it, you are buying access to someone else’s audience with no ability to match, suppress, or extend your own customer base.

This means the entry requirement is not a media budget. It is a data infrastructure. CRM data that is clean, consented, and structured. A customer data platform or equivalent that can ingest and activate it. Identity resolution that works across channels without relying on third-party cookies.

Most brands are further behind on this than they think. I have worked with organisations managing hundreds of millions in ad spend that had customer data sitting in three different systems, none of them talking to each other. The media agency was buying audiences that the brand could have matched against its own database. They were paying for reach they already owned.

Getting the data layer right is not a marketing project. It is a commercial infrastructure project that marketing needs to own the brief for. If your CMO is not in the room when data architecture decisions are being made, that is a problem.

Tools like Hotjar’s feedback and behaviour infrastructure are useful for understanding on-site intent signals, which feed into the broader picture of what your first-party data actually tells you about customer behaviour. The point is not any single tool. It is building a coherent picture of customer intent that you control.

How Commerce Media Networks Are Actually Structured

Understanding the structure matters because it determines where the value sits and who captures it.

Most retail media networks operate across two environments. On-site inventory is the sponsored placements, display units, and search results within the retailer’s own digital properties. This is high-intent, close to purchase, and relatively easy to measure. It is also increasingly crowded and expensive in the categories where everyone is competing.

Off-site inventory is where it gets more interesting. Retailers are taking their first-party audience data and activating it across programmatic exchanges, social platforms, and publisher networks. You are buying a retailer’s audience segment, but reaching them on the open web or in social feeds. The attribution is less clean but the scale is significantly larger.

The most sophisticated networks are building full-funnel capability. On-site for conversion. Off-site for awareness and consideration. Connected TV for brand-level reach with purchase data as the targeting layer. This is where commerce media starts to look genuinely different from what came before, because you have deterministic purchase data informing upper-funnel media decisions. That combination has not existed at scale before.

Vidyard’s research on pipeline and revenue potential touches on a related point: the most valuable signals are often the ones that connect content engagement to commercial intent. Commerce media is essentially the transactional equivalent of that, connecting purchase data to media decisions across the funnel.

Attribution in Commerce Media: Better Than Average, Still Imperfect

One of the genuine advantages of commerce media is attribution quality. When a retailer can tie an ad impression to a purchase in their own transaction system, that is a stronger signal than most digital advertising can offer. It is not perfect, but it is meaningfully better than last-click attribution on a generic display campaign.

I have judged the Effie Awards, and one of the things that becomes clear when you are evaluating effectiveness submissions is how rarely brands can draw a credible line between their media activity and actual commercial outcomes. Commerce media closes some of that gap. The closed-loop measurement is real, and for categories where purchase frequency is high and basket data is rich, it is genuinely useful.

But there are limits worth being honest about. Incrementality is the real question, and most retail media networks are not great at answering it. Showing that an ad appeared before a purchase is not the same as showing that the ad caused the purchase. The measurement frameworks are improving, but holdout testing and incrementality analysis are still not standard practice across most networks.

The other limitation is walled garden fragmentation. Every major retailer is building their own network with its own measurement methodology, its own reporting interface, and its own attribution model. Comparing performance across Walmart Connect, Amazon DSP, and a grocery network’s off-site product is not straightforward. The data does not aggregate cleanly, and the temptation to optimise within each walled garden separately leads to a portfolio that is harder to manage than it looks.

Forrester’s work on scaling agile approaches is relevant here in an indirect way: the operational challenge of managing multiple commerce media relationships requires the same kind of structural thinking as any complex scaling problem. You need clear ownership, clear measurement standards, and a way to aggregate learning across networks rather than optimising each in isolation.

Where Brands Should Actually Focus Their Attention

Given the complexity and the proliferation of networks, the practical question is where to direct attention and budget. Not every network is worth the operational overhead of engagement.

Start with the networks that are most aligned with your category and your customer’s purchase experience. If your product is bought primarily through grocery, the major grocery networks deserve serious evaluation. If you are in consumer electronics, Amazon and marketplace-native networks are the priority. Spreading budget across every available network before you have a clear view of what works in your primary channel is a way to generate a lot of activity and very little learning.

Second, invest in the measurement infrastructure before you scale the spend. Incrementality testing, holdout groups, and a clear view of your baseline conversion rate are not optional extras. They are the difference between knowing whether commerce media is working and just assuming it is because the attribution looks clean.

Third, think about the creative differently. On-site retail media inventory is not the place for brand-level storytelling. It is a transactional environment and the creative needs to match it: clear product, clear benefit, clear reason to choose now. Off-site and connected TV inventory is where you have more room to work on consideration and preference. Treating all commerce media placements the same way is a creative mistake that shows up in performance data.

Creator partnerships are increasingly part of the commerce media picture too. Later’s work on go-to-market with creators highlights how creator content is being integrated into commerce-driven campaign structures, particularly in seasonal and high-intent purchase moments. The line between social commerce and retail media is blurring, and brands that can operate across both will have an advantage.

The Strategic Shift: From Media Buyer to Data Partner

The most important reframe for brand teams is this: in the commerce media ecosystem, you are not just a media buyer. You are a data partner. The retailers and platforms building these networks want your first-party data as much as they want your media budget. The brands that bring clean, consented, well-structured customer data to the relationship get better targeting, better suppression, better lookalike modelling, and better measurement.

This changes the nature of the commercial relationship. It also raises questions that brand and legal teams need to be involved in answering. Data sharing agreements, consent frameworks, and data governance are not just compliance issues. They are commercial ones. The brand that cannot share data because its consent architecture is broken is at a structural disadvantage in this ecosystem.

I have seen this play out in agency relationships too. When I was growing a performance agency from a team of 20 to over 100 people, the clients who were ahead of the curve were the ones who had invested in their own data infrastructure early. They could brief us more precisely, evaluate our work more rigorously, and get more from every pound of media spend. The ones who were behind were perpetually catching up, and the gap did not close quickly.

BCG’s thinking on go-to-market strategy in complex categories makes a point that applies here: the brands that win at launch, or at major category shifts, are the ones that have done the structural preparation before the market moves. Commerce media is that kind of structural shift. The preparation window is narrowing.

For a broader view of how commerce media fits into a complete growth strategy, the Go-To-Market and Growth Strategy hub covers the strategic frameworks, channel decisions, and commercial thinking that connect channel-level tactics to business outcomes.

About the Author

Keith Lacy is a marketing strategist and former agency CEO with 20+ years of experience across agency leadership, performance marketing, and commercial strategy. He writes The Marketing Juice to cut through the noise and share what works.

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